Under the California Family Rights Act ("CFRA"), eligible California employees are entitled to take up to 12 weeks of unpaid medical leave each 12 month period to recover from a serious health condition or to care for a family member. An employee who takes CFRA leave is entitled to reinstatement to the same, or equivalent, position he or she held prior to taking the leave. However, a recent Court of Appeal case, Neisendorf v. Levi Strauss & Co., has held that, upon termination of the 12 week leave, employees who are not able to return to work without restrictions are not entitled to reinstatement.

In Neisendorf, the plaintiff, after receiving a poor performance review, began a CFRA leave. After eight weeks of leave, she was released to return to work with restrictions. While the employer agreed to work with the plaintiff to provide her with accommodations which would allow her to return to work, the employer insisted that the plaintiff could return to work only if she acknowledged and addressed the performance deficiencies identified in her performance review. Thereafter, the plaintiff and representatives of the employer worked together to identify appropriate accommodations. The plaintiff finally returned to work approximately fourteen weeks after she had begun her CFRA leave. However, she was immediately terminated when she refused to take responsibility for her performance issues.

In her lawsuit against the employer, the plaintiff claimed that the employer had retaliated against her for taking CFRA leave. The trial court dismissed this claim prior to trial, and the Court of Appeal affirmed. 

In reaching its decision, the Court of Appeal differentiated the requirements of the Fair Employment and Housing Act ("FEHA") and CFRA. Under FEHA, an employer is required, by statute, to provide an employee who is, or who is perceived as, disabled a reasonable accommodation if such reasonable accommodation will allow the employee to perform the essential duties of the position. In contrast, there is no such reasonable accommodation provision under CFRA. Accordingly, because the plaintiff was unable to return to work without restriction at the conclusion of her twelve week CFRA leave, the plaintiff in Neisendorf was not entitled to reinstatement, and her claim for retaliation under CFRA failed.

While Neisendorf is an important decision, employers should nonetheless exercise caution and seek legal counsel before terminating an employee who is unable to return from CFRA leave without an accommodation. While an employee may not be entitled to a reasonable accommodation based on his or her CFRA status, the employee may be entitled to a reasonable accommodation on some other basis. Significantly, in Neisendorf, a jury had found that the plaintiff was not disabled within the meaning of FEHA. Accordingly, the plaintiff was not entitled to a reasonable accommodation under that statute. In contrast, in another recent case, Gelfo v. Lockheed Martin Industries, Inc. (see update dated June 15, 2006), the California Court of Appeal held that employers have a duty to accommodate employees who are merely perceived as disabled, even if they are not "actually" disabled.

The Neisendorf decision is also important in that it held that employers can lawfully deny bonuses to employees who are terminated prior to the payout date if this is consistent with the bonus policy. Click here to view the update: California Court of Appeal Confirms That Employer Can Lawfully Deny Bonus To Employee Who Is Terminated Prior To The Payout Date if This is Consistent With The Bonus Policy.